Worldwide telecommunications standards are formulated and set by
Standards Setting Organizations so that different manufacturers can
produce equipment that is interoperable and so manufacturers can
compete with one another (for example, so that all 4G phones will
work with any 4G network). Standardization involves holders of
patents which are essential to an international telecommunications
standard declaring them as essential to the relevant standards
body. European SSOs require the holders of essential patents to
give an undertaking to license on fair, reasonable and
non-discriminatory ("FRAND") terms.

The goal is to strike a balance between the interests of the
public, inventors and implementers. Patentees should obtain
sufficient returns from their technical innovations but should not
be permitted to leverage their powerful position forged by the
standards to demand exorbitant royalty rates or unreasonable terms.
The core of the FRAND obligations lies in the determination of
reasonable and non-discriminatory royalties or royalty rates.

The Plaintiff, Unwired Planet, holds a worldwide patent
portfolio with numerous patents essential to telecommunications
standards. The Court previously completed five
"technical" trials regarding the validity, infringement
and essentiality of the patents. It was thus common ground that
Unwired Planet was bound to license on FRAND terms and the present
case addressed the FRAND royalty rates and the availability of
injunctive relief.

To determine FRAND terms, the Court looks at what a willing
licensor and licensee would agree upon in the relevant
circumstances, acting without holding out or holding up. The Court
determined a royalty rate by examining numerous factors in detail,
including the number of relevant patents and patent families,
comparable royalty rates, applicable standards and so on. The Court
held that there can be only one set of licence terms which are
FRAND in a given set of circumstances. The parties had exchanged
numerous licensing offers before trial, however, since those terms
were either higher or lower than the FRAND terms determined by the
Court, the offers were not FRAND.

The patents were previously found valid and infringed and
Unwired Planet wished to enter a worldwide licence. Huawei argued
that it could take a license under only UK patents and that Unwired
Planet could not insist otherwise. The Court disagreed,
holding:

Before turning to the impact of the litigation, this is a
convenient point to ask what sort of licence for Unwired
Planet's portfolio would be FRAND in terms of its geographical
scope when applied to a multinational licensee like Huawei? I will
start by asking what a willing licensor and a willing licensee with
more or less global sales would do. There is only one answer.
Unwired Planet's portfolio today is (and in 2014 it was)
sufficiently large and has sufficiently wide geographical scope
that a licensor and licensee acting reasonably and on a willing
basis would agree on a worldwide licence. They would regard country
by country licensing as madness. A worldwide licence would be far
more efficient.

...

I conclude that a worldwide licence would not be contrary to
competition law. Willing and reasonable parties would agree on a
worldwide licence. It is the FRAND licence for a portfolio like
Unwired Planet's and an implementer like Huawei. Therefore,
Unwired Planet are entitled to insist on it. It follows that an
insistence by Huawei on a licence with a UK only scope is not
FRAND.

The Court further noted that requiring a worldwide FRAND license
does not prevent a licensee from challenging validity or
essentiality of licensed patents in other jurisdictions.

The Court ruled that an injunction ought to be granted because
Huawei stood before the court without a licence but had the means
to become licensed on FRAND terms. Huawei argued that Unwired
Planet abused its dominant market position in negotiations and by
commencing the litigation before offering FRAND terms, and thus
Unwired Planet was not entitled to an injunction. The Court
disagreed, holding that Unwired Planet had not abused its dominant
position. The parties had been in contact prior to the litigation.
Offers in negotiation with rates higher or lower than the FRAND
rate which do not disrupt or prejudice the negotiation are
legitimate. For a sophisticated organization like Huawei, the fact
that an injunction was being claimed in the legal proceedings did
not prevent the parties from negotiating. The commencement of the
action, including the claim for an injunction, was not an abuse of
Unwired Planet's dominant position.

Many entrepreneurs and small business owners exhibit an extraordinarily high level of motivation. They are individuals with the wide-ranging skill set that is necessary to achieve success in their chosen field.

The Federal Court of Appeal has recently confirmed the decision of the trial judge and dismissed an appeal from a decision which found that use of the business name "Time Development Group" infringed...

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